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# What is the Illinois Special depreciation addition?

## What is the Illinois Special depreciation addition?

Public Act 102-16 amended Section 203 of the Illinois Income Tax Act to decouple Illinois from federal 100 percent bonus depreciation for tax years ending on or after December 31, 2021.

Pritzker signed into law SB2017, the state’s FY 2022 budget legislation. Among many other noteworthy items within that piece of legislation, Illinois officially decouples from federal bonus depreciation for tax years ending on or after December 31, 2021.

### How do you calculate special depreciation in Illinois?

The subtraction is computed on Form IL-4562 and it is equal to: 42.9% of the depreciation on property for which 30% or 50% federal bonus depreciation was claimed in tax years beginning after 2001 and ending on or before December 31, 2005; and.

Does IL recognize bonus depreciation?

Bonus depreciation decoupling Illinois has conformed to 100% bonus depreciation since the Tax Cuts and Jobs Act of 2017 (TCJA)6 reinstituted the concept for federal income tax purposes. Under the budget bill, Illinois will no longer conform to 100% bonus depreciation for tax years ending on or after Dec. 31, 2021.

#### How do I fill out a 4562 depreciation?

What do you need to fill out Form 4562

1. The price of the asset you’re depreciating.
2. A receipt for the asset you’re depreciating.
3. The date the asset was put into use (when you started using it for your business)
4. The total income you’re reporting for the year in question.

When did Illinois allow bonus depreciation?

Applicable for tax years ending on or after December 31, 2021, S.B. 2017 provides that Illinois decouples from 100% federal bonus depreciation.

## How do you calculate state depreciation?

Depreciation Calculation

1. Determine the basis of the property.
2. Determine the percentage of business use (vehicles and offices)
3. Multiply the basis by the percentage of business use.
4. Subtract from the result amount deducted under Section 179.
5. Multiply the result by 100% (in 2022) for special depreciation allowance.

Where do I report bonus depreciation on Form 4562?

Use Form 4562 to:

1. Claim your deduction for depreciation and amortization,
2. Make the election under section 179 to expense certain property, and.
3. Provide information on the business/investment use of automobiles and other listed property.

### Do you need to file Form 4562 to depreciate your property?

You are only obligated to file Form 4562 if you’re deducting a depreciable asset on your tax return. A depreciable asset is anything you buy for your business that you plan on using for more than one financial year. Generally, inventory doesn’t count. Neither do small purchases like paperclips or windex.

How do I claim depreciation on my taxes?

Claiming a deduction for depreciation Generally, you can claim a deduction for the decline in value of depreciating assets each year over the effective life (unless you’re eligible to claim an immediate or accelerated deduction using a tax depreciation incentive).

#### What is a state depreciation deduction?

State tax bonus depreciation deductions allow income taxpayers to claim depreciation of business or income-producing property at a higher percentage the first year the property is in service.

How much depreciation can I claim?

By convention, most U.S. residential rental property is depreciated at a rate of 3.636% each year for 27.5 years. Only the value of buildings can be depreciated; you cannot depreciate land.